Do you R&D?
As you leave Beijing airport and follow the Bei-Four Beltway to the Haidian Park area of Zhongguancun, all along the way you are welcomed by billboards saying "That VIA Feeling, In the Heart of China," and from time to time an Acer sign springs into view as well.
VIA Technologies set up shop in Beijing only two years ago, drawn by the local market and the wealth of talent. VIA's R&D department began operating a year ago, and its original target for the first phase (the first two years) was to recruit 200 R&D people and create a strong foundation. The long-term hope is to have an R&D staff of 2000 working here, which would be on a par with the Beijing research institute founded by Intel.
However, after one year in action, VIA Beijing only has about 50 or 60 people. Chief Administrative Officer Tom Hsu says that because most European and American conglomerates set up their China headquarters in Beijing, they are squeezing the labor market and making it hard for Taiwan firms to recruit skilled people. This is reflected in a common refrain at the top Beijing schools: "Come, come, come to Beijing University. Go, go, go to America." So the supply of skilled people is not nearly as large as was anticipated.
Fortunately, after a year of exploring the scene, Hsu has a much better grasp of the municipality's manpower market, such as which professors can deliver what kind of students, what research is being conducted and by whom, and so on. The earlier you hit the campuses, he has found, the more successful you will be.
Global View general manager Chou Chih-yuan, who has been permanently stationed in Beijing since 1993, is an even more experienced headhunter. He explains that while it cannot be said that there are few skilled people in the information industry in Taiwan, most of them have been "sucked up" by Taiwan Semiconductor and United Microelectronics. A company like Global View, which produces electronic dictionaries and needs lots of programmers, is better off finding their staff elsewhere. When you look around the world, except for India, Beijing is the place you will find the largest number of skilled software people.
A wasteland
Chou Chih-yuan's impression of Beijing in the early 90s was a "wasteland." Not only were there few international firms, you couldn't even sniff out a high-tech footprint at Peking University or Tsinghua University. One employee who graduated from Tsinghua in the late 80s says that there were few computers at the school in his day. In his five years in college he spent only 100 hours on computers. Students wrote out their programs on paper, and professors had to judge at a look whether the programs would work. When he saw the quite ordinary computer books brought from Taiwan by Chou, this employee was like a child in a candy store.
At that time Chou figured that the mainland had plenty of smart people but no cash, no information, and no experience, whereas the situation was exactly the opposite in Taiwan. "The fit was almost too perfect!" Chou recruited some top-level hard science students and started training them from scratch.
Chou adds that in the past the situation in the mainland was polarized. At one end were a few elite individuals developed by and for the Ministry of Defense. At the other end was a huge supply of poorly educated labor. Meanwhile there was a dearth of middle-ranking technical personnel. In the last few years policy in the mainland has reversed course, and the system is now producing large numbers of the middle-ranking staff people that business needs.
In 1995, 800,000 students entered university in all of China. Last year the figure was 1.2 million. The number of MA holders has also increased dramatically. Thus, though foreign companies have been pouring in and recruiting people, labor costs will probably still stay at a reasonable level. Currently, an employee at a foreign-owned R&D facility in Beijing earns about RMB4000-5000 per month (somewhat over NT$20,000), less than half the amount in Taiwan.
The problem is not affording skilled people, but getting the legal right to hire them. According to PRC regulations, students who test into Peking University from other provinces or cities must return to their home areas after graduation. Only state-owned enterprises are allowed to recruit people who do not have their legal residence in Beijing. At one point the cost of a Beijing residence permit on the black market reached about RMB100,000, so you can see what a precious commodity it is.
"The vast majority of the people who come applying for jobs are students from outside of Beijing, and they always ask: 'Can you take care of the residence problem?' If you can't, they leave." Like other companies, when seeing these prime candidates walk past their doors, Global View had no choice but to accept the next best thing, and hire personnel who jumped over from state-owned enterprises.
Since last year, however, Beijing allows 64 enterprises to apply for Beijing residence on behalf of employees. Most are privately owned mainland companies like Founder and Legend. Global View is the only Taiwan firm on the list. This distinction means that they can recruit freely, and finally solve a problem that has been plaguing them for many years.
Over the long May Day holiday, China's more than one billion people take to the road for travel. Tens of thousands visit the Imperial Palace, where this year many added their names to the signature drive for Beijing's Olympic bid.